Today’s real estate market seems to be doing great, as the economy continues the growth trend that it has been on for the last several years.

Viewed from a 30,000-foot perspective, everything looks great. Exports are growing. The stock market is high. Unemployment is low. The Fed makes optimistic statements about the future and may let interest rates rise.

Ingo Wizner, president of Local Market Monitor, which has followed real estate dynamics and the economy in 300 local markets since 1989 and is especially known for our forecasts of home prices, a closer look shows less euphoria.

In a third of the 320 markets my company Local Market Monitor covers, the number of jobs increased by less than 1 percent in the past year,” he told Forbes. “In half of those 320 markets, income grew less than inflation. In two-thirds of them, home prices have not fully recovered from the last recession.”

As real estate agents, we all want to know what this means for real estate and investing.

Wizner says a key development of the last several decades is the concentration of economic activity.

“The logic of corporate enterprise pushes companies to grow as much as possible, which sophisticated technology now facilitates,” he said. “At the same time, companies are more reliant on the infrastructure and outsourced services that exist in urban centers.”

The end result of this is a concentration of economic output which is limited to a select number of markets. In fact, 50 metro areas in the U.S. now produce 75 percent of total GDP.

Moreover, sales have been tepid at best and inventories remain consistently low.  Unfortunately, this situation does not seem likely to change anytime soon. Survey evidence from the Siena Research Institute indicates that, while consumer plans to purchase cars, electronics, and furniture are stable in New York, plans to purchase homes are conspicuously low.

Wizner notes that the signs point to the development of two distinct types of real estate markets:, one closely linked to the supply and demand cycles of the national economy and one where the local economy is affected more by social characteristics than by production output.

“Sure, in the long term, all these markets are connected, but in the time-frame of real estate investors, the differences may be the key to good investment strategies,” he wrote.

Wizner also points out that the investment significance for markets that are closely linked to the national economy is that demand and supply are often out of sync, leading to classic home price and rent cycles that may last just a few years at a time.

“These markets present opportunities for bigger returns but also have higher risk; investors need to have specific entry and exit plans and need to pay close attention to ongoing economic developments,” he said.

In theory, rising wages and an economy that continues to grow should elevate the real estate sector as well— a rising tide lifts all boats. In practice, however, this has not been the case in all markets, to which many agents and brokers can attest.

Despite a strong labor market and overall favorable economic conditions, wary consumers and sellers have held the real estate sector in check, leaving many agents scratching their heads.